Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholders' equity

SHAREHOLDERS’ EQUITY

a) Authorized shares

The issued share capital consists of the following:

	December 31,
	2014		2013
Common shares issued and fully paid, 2014 and 2013: CHF 4.10 per share	100,775,256		103,477,452
Share capital at end of year	$	408,020	$	418,988

	2014		2013
Shares issued at beginning of year	103,477,452		109,109,604
Shares cancelled	(2,702,196	)	(5,632,152	)
Total shares issued at end of year	100,775,256		103,477,452
Treasury shares issued at beginning of year	3,223,806		4,716,261
Shares repurchased	4,906,785		5,544,432
Shares issued out of treasury	(848,621	)	(1,404,735	)
Shares cancelled	(2,702,196	)	(5,632,152	)
Total treasury shares at end of year	4,579,774		3,223,806
Total shares outstanding at end of year	96,195,482		100,253,646

During the years ended December 31, 2014, and 2013, 2,702,196 and 5,544,432 voting shares repurchased and designated for cancellation, respectively, were constructively retired and cancelled.

Effective July 9, 2013, the Company cancelled 87,720 non-voting shares held in treasury and 4,616,058 shares previously repurchased and constructively retired, following a required filing with the Swiss Commercial Register in Zug.

As required under Swiss law, the Company cannot hold more than 10% of its registered capital in treasury shares, unless it receives shareholder approval to do so.

b) Dividends

As a holding company, Allied World Switzerland’s principal source of income is dividends or other sources of permitted payments from its subsidiaries. These funds provide the cash flow required for dividend payments to the Company’s shareholders. The ability of our insurance and reinsurance subsidiaries to make dividend payments is limited by the applicable laws and regulations of the various states and countries in which they operate.

The Company’s primary restrictions on net assets of subsidiaries consist of regulatory requirements placed upon the regulated insurance and reinsurance subsidiaries to hold minimum amounts of total statutory capital and surplus and there were no other material restrictions on net assets in place as of December 31, 2014.

Under Swiss law, distributions to shareholders may be paid only if the Company has sufficient distributable profits from previous fiscal years, or if the Company has freely distributable reserves, each as presented on the audited stand-alone statutory balance sheet. Distributions to shareholders out of the share and participation capital may be made by way of a capital reduction in the form of a reduction to par value to achieve a similar result as the payment of a dividend. Under Swiss law, if the Company’s general capital reserves amount to less than 20% of the share and participation capital recorded in the Swiss Commercial Register, then at least 5% of the Company’s annual profit must be retained as general reserves.

On May 2, 2013, the shareholders approved the Company’s proposal to pay cash dividends in the form of a distribution out of general legal reserve from capital contributions. The distribution amounts were paid to shareholders in quarterly dividends of $0.167 per share in July 2013, October 2013, January 2014 and April 2014.

On May 1, 2014, the shareholders approved the Company’s proposal to pay cash dividends in the form of a distribution out of general legal reserve from capital contributions. The distribution amount will be paid to shareholders in quarterly dividends of $0.225 per share. The first dividend was on July 2, 2014, the second dividend was on October 2, 2014 and the third dividend was on January 2, 2015. The Company expects to distribute the remaining dividend in April 2015.

The Company paid the following dividends during the years ended December 31, 2014, 2013 and 2012:

Dividend Paid	Partial Par Value Reduction Per Share		Dividend Per Share		Total Amount Paid
October 2, 2014		N/A	$	0.225	$	21,686
July 2, 2014		N/A	$	0.225	$	21,870
April 3, 2014		N/A	$	0.167	$	16,495
January 2, 2014		N/A	$	0.167	$	16,732
October 3, 2013		N/A	$	0.167	$	16,952
July 3, 2013		N/A	$	0.167	$	17,117
March 12, 2013	CHF	0.11	$	0.125	$	12,981
December 18, 2012	CHF	0.11	$	0.125	$	13,010
September 25, 2012	CHF	0.12	$	0.125	$	13,324
August 6, 2012	CHF	0.12	$	0.125	$	13,394
April 6, 2012	CHF	0.11	$	0.125	$	13,795
January 6, 2012	CHF	0.12	$	0.125	$	14,302

c) Share Repurchases

On May 1, 2014, the shareholders approved a new share repurchase program in order for the Company to repurchase up to $500,000 of Allied World Switzerland's common shares. This new share repurchase program supersedes the 2012 share repurchase program and no further repurchases will be made under the 2012 share repurchase program. Repurchases may be effected from time to time through open market purchases, privately negotiated transactions, tender offers or otherwise. The timing, form and amount of the share repurchases under the program will depend on a variety of factors, including market conditions, the Company’s capital position, legal requirements and other factors. Under the terms of this share repurchase program, the first three million of common shares repurchased will remain in treasury and will be used by Allied World Switzerland to satisfy share delivery obligations under its equity-based compensation plans. Any additional common shares repurchased will be designated for cancellation at acquisition and will be canceled upon shareholder approval. Shares repurchased and designated for cancellation are constructively retired and recorded as a share cancellation.

Shares repurchased by the Company and not designated for cancellation are classified as “Treasury shares, at cost” on the consolidated balance sheets. The Company will issue shares out of treasury principally related to the Company’s employee benefit plans. Shares repurchased and designated for cancellation are constructively retired and recorded as a share cancellation.

The Company’s share repurchases were as follows:

	Year Ended December 31,
	2014		2013		2012
Common shares repurchased	4,906,785		5,544,432		10,967,877
Total cost of shares repurchased	$	175,373	$	174,686	$	263,942
Average price per share	$	35.74	$	31.51	$	24.07